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Soldier Creek - Dugout Canyon Mines

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Soldier Creek Coal Company

The coal mined from the Soldier Canyon mine was hauled by truck 18 miles to the rail car loadout at Banning on D&RGW's Sunnyside Branch, at Sunnyside Junction, where the railroad branch passes under U.S. Highway 6.

The following comes from Utah Division of Natural Resources, Utah Coal Program, Permit C0070018:

The Soldier Canyon Mine is located in the Book Cliffs Coal Field approximately 12 miles northeast of Wellington, Utah. Initial prospecting took place there as early 1906, however actual mining via hand loading methods did not commence until 1935. The limited production from the mine was initially sold as home heating coal in Carbon and Emery counties.

Production reached approximately 1,200,000 tons per year via continuous mining methods conducted in the Sunnyside and Rock Canyon seams before the mine was idled in 1999.

Overburden thickness ranges from approximately 100 feet under Soldier Creek Canyon to over 2,000 feet. The permit area encompasses about 6,600 acres and is comprised of state and federal leases and fee properties.

January 4, 1935
The Soldier Canyon mine was leased to Premium Coal Company, which continued to ship coal from the mine until 1972. The coal was loaded into wagons, and later trucks, by hand and sold locally for home heating coal in Carbon and Emery counties. Initial prospecting of the Soldier Canyon mine was conducted on the property as early as 1906. (Utah Division of Oil Gas and Mining, Permit C0070018)

"William Shield had worked Soldier's Canyon Mine mostly by himself until 1945 when he sold his lease to Andrew Marinoni. Marinoni then profited considerably from the economic prosperity immediately following the war." (History of Carbon County, by Ronald G. Watt, Utah State Historical Society, 1997, page 123)

In 1973, California Portland Cement Co. began looking for other sources of energy to replace natural gas and fuel oil used at its cement plants. Although looking to sign a long-term supply contract, the company found a property near Wellington that was for sale. The purchase was completed in September 1974. After a period of mine design by mining consulting engineers, in August 1975, Centennial Development Co. started work to drive two slopes to access the coal seams, and rehabilitate the old workings. The mine was ready for production in March 1976, and the first coal was produced on June 14, 1976. Between the day of first production and January 1980, 1.9 million tons had been produced, and by September 1980 production was reported as averaging 2,700 tons per day. Room-and-pillar mining was the method being used, with three continuous miner machines in use. Coal was shipped 18 miles by truck, using Savage Brothers trucks, from the mine to the railroad loadout. At the loadout, a 200-ton surge loading bin was used, with a capacity of 3,000 tons per hour. Trains were not unit trains, and the actual number of cars shipped to the four cement plants varied. The average train was 21 cars, or about 2,000 tons. (Coal Age, Volume 85, Number 9, September 1980, page 109)

September 1, 1974
The transfer of the federal coal lease held by Premium Coal Company to California Portland Cement Company went into effect. The transfer was approved on July 31, 1974. (Utah Division of Oil Gas and Mining, Permit C0070018)

The Soldier Canyon mine was a captive mine, opened in June 1976 by the Soldier Creek Coal Company, a subsidiary of California Portland Cement Company. The mine would furnish coal to three cement plants, at Colton and Mojave, California, and at Rillito, Arizona. California Portland Cement acquired the mine property in September 1974 from the Marinoni family of Price. They were doing business as Premium Coal Company. The mine had been closed since 1972. Rehabilitation work on the mine started in September 1975. (Deseret News, May 19, 1976)

Soldier Canyon mine was developed on what was known as the Soldier Creek Tract, consisting of 2,168 acres. The coal reserves were estimated as 81.9 million tons, of which 37 million tons were potentially recoverable. Annual coal production was planned to be 925,000 tons, over the 40-year life of the mine. Coal was to be trucked 17.6 miles by way of Soldier Creek Road and U. S. Highway 6, to a new loadout east of Wellington, Utah. Coal shipments were planned as 97 truck trips per day, along with 19 trips per day for other purposes. (Bureau of Land Management, Unita-Southwestern Coal Region, Final Environmental Impact Statement)

Sale To Sun Oil, 1985

July 1985
"Sunedco Coal Co. Buys Soldier Creek Mine -- Sunedco Coal Co., Lakewood, Colo., expects to take possession of Soldier Creek Coal Co., near Price, Utah, this September under a $22 million cash purchase agreement." "Soldier Creek's Soldier Canyon mine, an underground operation 22 miles southeast of Price, is adjacent to Sunedco's undeveloped reserves of more than 130 million tons at Sage Point." "Sunedco has no plans in the immediate future to enlarge operations, "but clearly we're interested in expanding production as market opportunities permit," said Ian Northern, Sunedco vice president for planning." "Soldier Creek produced 600,000 tons last year. Most of the production was sold to industrial users under contracts that will pass to Sunedco." (Coal Age, Volume 90, Number 7, July 1985, page 30)

On September 5, 1985, California Portland Cement Company, a subsidiary of CalMat Co., sold its interests in the Soldier Canyon mine and the associated coal lease to Sunedco Coal Company, a subsidiary of Sunoco Energy Development Corporation (Sunedco), itself a subsidiary of Sun Oil Company (Sunoco). The sale was first announced in June 1985. (San Bernardino Sun, September 4, 1985; September 6, 1985; Deseret News, September 9, 1985; Letter, CalMat Company to Utah Division of Oil Gas and Mining, dated November 20, 1985)

The sale of Soldier Creek Coal Company to Sunedco was for a reported $22 million. (Los Angeles Times, October 1, 1985)

(CalMat Company had been established in 1984 by the merger of California Portland Cement Company, and Consolidated Rock Products Company, also known as Conrock)

(Sunedco reincorporated Soldier Creek Coal Company in Delaware on January 18, 1985, and transferred all assets of the old company to the new company.)

November 30, 1985
All coal reserves in the state of Utah formerly owned by Sunedco became owned or leased by Sage Point Coal Company. (Utah Division of Oil Gas and Mining, Permit C0070018)

Sage Point Coal Company had been incorporated in Delaware on November 12, 1985, and was incorporated in Utah on January 8, 1986. Its office was in Roanoke, Virginia. The corporation was dissolved on February 8, 1998. (Utah Secretary of State incorporation records)

March 31, 1986
Elk River Resources paid the $5 permit application fee for the Soldier Canyon mine, although the check was a Sunedco Coal Co. check. (Utah Division of Oil Gas and Mining, Permit C0070018)

(Elk River Resources had been a subsidiary of Sun Oil Company since August 31, 1979, with the sale made final on October 1, 1979. The price paid was reported as $300 million, in the form of 5.1 million shares of Sun Oil common stock. -- New York Times, September 1, 1979, "yesterday"; SEC Form 10-K, dated March 3, 1994)

December 31, 1987
Sunedco Coal Company and Sunoco Energy Development Corporation were merged into Sage Point Coal Company. At that time, Sage Point Coal Company became the sole and complete owner of Soldier Creek Coal Company. (Utah Division of Oil Gas and Mining, Permit C0070018; Soldier Canyon Mine)

By late 1992, all of the shares of Soldier Creek Coal Co. were held by Sage Point Coal Co., operator of numerous coal mines in Virginia, Kentucky, Tennessee and West Virginia.

Sale To Coastal States, 1993

July 3, 1993
Coastal States Energy Company, a subsidiary of Coastal Corporation, purchased Elk River Resources, Inc., from Sun Oil Company. Included were subsidiaries Sage Point Coal Company, and its subsidiary Soldier Creek Coal Company. Utah Division of Oil Gas and Mining was informed by a letter dated August 9, 1993 that Soldier Creek Coal Company was 100 percent owned by Sage Point Coal Company, which in turn was 100 percent owned by Elk River Resources, Inc. The purpose of the letter was to inform the division that on July 3, 1993, Coastal States had purchased Sage Point Coal Co. from Elk River, and that Coastal States was now the overall parent company. The sale was closed on September 15, 1993. (Utah Division of Oil Gas and Mining, Permit C0070018; Soldier Canyon Mine; SEC Form 10-Q, dated August 15, 1994)

August 9, 1993
Coastal States applied to the Utah Division of Oil Gas and Mining to transfer the Soldier Canyon permit (C007018) previously held by Sunedco, with Elk River Resources as the parent company, to Coastal States as the parent company of Soldier Creek Coal Co. A revised application was submitted on September 3, 1993. The transfer fee of $5 was paid with a Southern Utah Fuel Co. check. (Utah Division of Oil Gas and Mining, Permit C0070018; Soldier Canyon Mine)

Sale To Canyon Fuel, 1996

December 1996
Coastal States Energy Company sold its coal mining properties in Utah to Canyon Fuel Company, a new company owned jointly by Arco Coal (65%) and Itochu of Japan (35%).

December 20, 1996
Soldier Creek Coal Company was merged with Sage Point Coal Company, which was then merged into the existing Coastal States Energy Company. On the same day, Southern Utah Fuel Company, Skyline Coal Company, Coastal Development Company, and Utah Fuel Company, were also merged into the existing Coastal States Energy Company, which in turn was merged with Canyon Fuel Company (all on the same day), with Canyon Fuel Company being the surviving company. (Utah Division of Oil Gas and Mining, Permit C0070039; Dugout Canyon Mine)

"Effective December 20, 1996, Canyon Fuel Company, LLC was formed as a joint venture between ARCO Uinta Coal Company (65% ownership) and ITOCHU Coal International Inc. (35% ownership) for the purpose of acquiring certain Utah coal operations and an approximate 9% interest in Los Angeles Export Terminal, Inc. from Coastal Coal, Inc. and The Coastal Corporation. Effective June 1, 1998, ARCO Uinta Coal Company's ownership of the Company was acquired by Arch Western Resources, LLC." (Arch Coal, Inc., SEC Form 10K, dated March 2, 1999)

July 15, 1997
The federal coal lease for the Soldier Canyon mine was transferred to Canyon Fuel Company, with an effective date of March 1, 1996. (Utah Division of Oil Gas and Mining, Permit C0070018; Soldier Canyon Mine; Arch Coal, Inc., SEC Form 10K, dated March 2, 1999, which shows the date as July 19, 1997)

June 1, 1998
Arco Coal sold its 65 percent interest in Canyon Fuel Company, to Arch Coal Company. (Arch Coal, Inc., SEC Form 10K, dated March 2, 1999)

Last scheduled shift at the Soldier Canyon Mine was on October 30, 1998.

March 25, 1999
Production at the Soldier Canyon mine ceased. (Utah Division of Oil Gas and Mining, Permit C0070018; Soldier Canyon Mine)

July 1999
The Soldier Canyon mine was indefinitely sealed in July 1999. (Utah Division of Oil Gas and Mining, Permit C0070018; Soldier Canyon Mine)

Production at the Soldier Canyon mine ceased after Soldier Creek Coal Co. opened its new Dugout Canyon mine in 1998.

Dugout Canyon Mine

The Dugout Canyon mine shipped coal by truck to the Acco/C. V. Spur/Savage Coal Terminal, south of Price, where the coal was loaded into rail cars for movement to the Intermountain Power Project near Lynndyl, Utah.

The coal mining permit for the Dugout Canyon mine was issued to Sunedco Coal Company in April 1984, but no development took place until the mine was purchased by Coastal States Coal Company in 1993. In December 1996, Coastal States was reorganized as a 65 percent owner of Canyon Fuel Company, which received a new permit for the Dugout Canyon mine in February 1998. Production started in (?), in time to supply coal to IPP, beginning on January 1, 1999. As of early 2016, the Dugout Canyon mine continues to supply coal to IPP.

The Dugout Canyon mine was formerly operated between 1940 and November 1965 by the Knight-Ideal Coal Co. Extraction from two coal seams totaled approximately 1,320,000 tons. (Utah Division of Oil Gas and Mining, Permit C0070009; Sage Point-Dugout Canyon Mine)

Lease timeline:

January 24, 1979
Kennecott Coal Company, a unit of Kennecott Copper Corporation, sold property containing 89 million tons of coal reserves, to Pacific Gas & Electric Company, for a reported $8 million. The property consisted of 2,736 acres of federal coal leases and 1,170 acres of private coal land. (New York Times, January 24, 1979)

August 1979
The proposed mine site was the subject of a field inspection by personnel of the Utah Division of Oil Gas and Mining. The proposed mine was to be developed by Sage Point-Dugout Coal Company, and its affiliated company, Eureka Energy, which itself was subsidiary of Pacific Gas & Electric. After completing exploratory drilling, and several wildlife studies, on December 8, 1980, Eureka Energy applied for a permit to construct and operate underground mining facilities at the Sage Point-Dugout Canyon Project. (Utah Division of Oil Gas and Mining, Permit C0070009; Sage Point-Dugout Canyon Mine)

(As a point of reference, Sage Point is the 8,478-foot peak on the ridge 1.25 miles east-southeast of the Soldier Canyon mine, and 2.5 miles west-northwest of the Dugout Canyon mine.)

February 10, 1982
Eureka Energy sold its interest in the Sage Point-Dugout Canyon Project to Sunedco Coal Company, a unit of Sun Oil Company. Pending the completion of the governmental permitting processes (85 percent federal and 15 percent state), construction of access roads into Fish Creek Canyon and Dugout Creek Canyon was to begin on or about June 1, 1982. (Utah Division of Oil Gas and Mining, Permit C0070009; Sage Point-Dugout Canyon Mine)

(Sunedco = Sunoco Energy Development Corporation)

September 19, 1983
Sunedco applied for its own permit as an addendum to the original Eureka Energy application. (Utah Division of Oil Gas and Mining, Permit C0070009; Sage Point-Dugout Canyon Mine)

April 30, 1984
After several months of exploration drilling, as well as government permitting correspondence, U. S. Office of Surface Mining issued a 5-year permit Sunedco Coal Company for the development and operation of the Sage Point-Dugout Canyon mine. On June 5, 1984, the Utah Division of Oil Gas and Mining issued its permit for the state lands portion of the coal lease. (Utah Division of Oil Gas and Mining, Permit C0070009; Sage Point-Dugout Canyon Mine)

Site inspections in March and April 1985 found that the Price office of Sunedco had been closed, with no apparent activity at the mine site itself. (Utah Division of Oil Gas and Mining, Permit C0070009; Sage Point-Dugout Canyon Mine)

September 1986
Sunedco informed state regulators that there would be no activity for several years. (Utah Division of Oil Gas and Mining, Permit C0070009; Sage Point-Dugout Canyon Mine)

December 9, 1986
Sunedco Coal Company informed Utah Division of Oil Gas and Mining that its planned development of the Dugout Canyon mine would begin in about April 1984, and would be in operation by April 1989. The facilities included a coal preparation plant and a railroad spur. (Utah Division of Oil Gas and Mining, Permit C0070009; Sage Point-Dugout Canyon Mine)

February 1987
Sunedco requested that, due to economic conditions, their permit be revoked and their bond of $611,875 be returned, which was accomplished on May 19, 1987. (Utah Division of Oil Gas and Mining, Permit C0070009; Sage Point-Dugout Canyon Mine)

Sale To Coastal States, 1993

July 3, 1993
Coastal States Energy Company, a subsidiary of Coastal Corporation, purchased Sage Point Coal Company, and its subsidiary Soldier Creek Coal Company, from Elk River Resources, Inc. Utah Division of Oil Gas and Mining was informed by a letter dated August 9, 1993 that Soldier Creek Coal Company was 100 percent owned by Sage Point Coal Company, which in turn was 100 percent owned by Elk River Resources, Inc. The purpose of the letter was to inform the division that on July 3, 1993, Coastal States had purchased Sage Point Coal Co. from Elk River, and that Coastal States was now the overall parent company. (Utah Division of Oil Gas and Mining, Permit C0070018; Soldier Canyon Mine)

(Elk River Resources had been a subsidiary of Sun Oil Company since August 31, 1979. -- New York Times, September 1, 1979, "yesterday")

Sage Point Coal Company had been incorporated in Delaware on November 12, 1985, and was incorporated in Utah on January 8, 1986. Its office was in Roanoke, Virginia. The corporation was dissolved on February 8, 1998. (Utah Secretary of State incorporation records)

In 1995, Sage Point Coal Company, a subsidiary of Coastal States Energy Company, was the successful bidder for the coal lease on the Alkali Creek tract adjacent to their Soldier Canyon mine. The tract held 2,177 acres and 12 million tons of recoverable coal. Sage Point paid $2,667,000 for the tract lease. (Utah Mineral Activity Summary for 1995, page 10)

March 15, 1996
Coastal States Energy applied for a new permit for the Dugout Canyon mine, with an application that included most of the documents from the earlier Eureka Energy/Sunedco application. Soldier Creek Coal Co. was shown as the operating company; Sage Point Coal Company is not shown. Permit review continued through February 1998, when Canyon Fuel expressed concern at the time the process was taking. Canyon Fuel stated that an opening date after March 1998 would cause serious economic problems. (Utah Division of Oil Gas and Mining, Permit C0070039; Dugout Canyon Mine) (note different permit number)

December 1996
Coastal States Energy Company sold its coal mining properties in Utah to Canyon Fuel Company, a new company owned jointly by Arco Coal (65%) and Itochu of Japan (35%).

Sale To Canyon Fuel, 1996

December 20, 1996
Sage Point Coal Company was merged with Soldier Creek Coal Company, and Sage Point was then merged into the existing Coastal States Energy Company. On the same day, Southern Utah Fuel Company, Skyline Coal Company, Coastal Development Company, and Utah Fuel Company, were also merged into the existing Coastal States Energy Company, which in turn was merged with Canyon Fuel Company (all on the same day), with Canyon Fuel Company being the surviving company. (Utah Division of Oil Gas and Mining, Permit C0070039; Dugout Canyon Mine)

"Effective December 20, 1996, Canyon Fuel Company, LLC was formed as a joint venture between ARCO Uinta Coal Company (65% ownership) and ITOCHU Coal International Inc. (35% ownership) for the purpose of acquiring certain Utah coal operations and an approximate 9% interest in Los Angeles Export Terminal, Inc. from Coastal Coal, Inc. and The Coastal Corporation. Effective June 1, 1998, ARCO Uinta Coal Company's ownership of the Company was acquired by Arch Western Resources, LLC." (Arch Coal, Inc., SEC Form 10K, dated March 2, 1999)

March 1, 1997
The federal coal lease for the Dugout Canyon mine held by Coastal States Energy Company was transferred to Canyon Fuel Company. (Arch Coal, Inc., SEC Form 10K, dated March 2, 1999)

January 1, 1999
Arch Coal signed a contract with Intermountain Power Agency to supply 2.2 million tons of coal per year, through 2010, with an option to supply the same amount through 2015. (Arch Coal, Inc., SEC Form 10K, dated March 2, 1999)

March 2000
Canyon Fuel Company reduced production at its Dugout Canyon mine. All coal produced was trucked to the Savage Coal Terminal near Price, Utah. Production at the Soldier Canyon mine had ceased in March 1999, and that mine was sealed in July 1999. The Banning loadout was indefinitely idled due to all coal being trucked to the other site. (Utah Division of Oil Gas and Mining, Permit C0070034, Banning Loadout)

July 15, 2004
"St. Louis (July 15, 2004) -- Arch Coal, Inc. announced today that it has signed a definitive agreement to acquire Itochu Corporation's 35% interest in Canyon Fuel Company, LLC for a contract price of $112 million. With the completion of this transaction, Canyon Fuel will become a wholly owned subsidiary of Arch Coal." "Canyon Fuel owns and operates two longwall mines in Utah - Sufco in Sevier County and Dugout Canyon in Carbon County. In addition, the company owns the currently idle Skyline mine, which also is located in Carbon County. In total, Canyon Fuel controls approximately 161 million tons of high-quality, low-sulfur coal reserves in Utah. In 2003, Canyon Fuel produced approximately 13.0 million tons of coal." The sale was completed on July 29, 2004. (Arch Coal, Inc., press release dated July 15, 2004, "today")

Sale To Bowie, 2013

August 16, 2013
Bowie Resource Holdings completed its purchase of 100 percent interest of Canyon Fuel Company, a subsidiary of Arch Coal Company. The purchase included the Soldier Canyon mine, along with the Dugout Canyon mine, the Banning loadout, the Sufco mine, and the Gordon Creek mines (previously owned by Mountain Coal Company). The purchase agreement was first signed on June 27, 2013.

August 19, 2013
"St. Louis, Aug. 19, 2013 -- Arch Coal, Inc. today announced that it has completed the sale of its subsidiary, Canyon Fuel Company, LLC to Bowie Resources, LLC for $423 million in cash. The sale includes the Sufco and Skyline longwall mines, the Dugout Canyon continuous miner operation and approximately 105 million tons of bituminous coal reserves, all located in Utah." (Arch Coal, Inc., press release dated August 19, 2013, "today")

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